The recommendations provide a new paradigm which will put Indias public finance framework at par with the best in the world.
The introduction of the goods and service tax, at the central and state levels, is especially welcome as it will simplify the entire tax structure. This will ensure the abolition of all taxes such as octroi, central sales tax, state level sales tax, entry tax, stamp duty, telecom licence fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods & services and eliminate the cascading effects of multiple layers of taxation. This will mean that the benefits of fiscal reforms are both comprehensive and effective.
The report of the Kelkar task force has suggested a fundamental restructuring of Indias public finance by proposing medium term budgetary process instead of annual budgetary process followed currently.
The task force has set out the medium term budgetary objectives and worked out different strategies for attaining these over a five-year period.